Back to top

Image: Bigstock

TRTN or WAB: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Transportation - Equipment and Leasing stocks are likely familiar with Triton International and Westinghouse Air Brake Technologies (WAB - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Triton International and Westinghouse Air Brake Technologies are both sporting a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

TRTN currently has a forward P/E ratio of 8.60, while WAB has a forward P/E of 25.28. We also note that TRTN has a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WAB currently has a PEG ratio of 2.20.

Another notable valuation metric for TRTN is its P/B ratio of 1.28. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WAB has a P/B of 3.14.

These are just a few of the metrics contributing to TRTN's Value grade of A and WAB's Value grade of D.

TRTN and WAB are both solid stocks with improving earnings outlooks, but based on the above valuation figures, it seems like value investors will conclude that TRTN is the superior option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Westinghouse Air Brake Technologies Corporation (WAB) - free report >>